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America needs jobs, jobs, jobs -- voters are practically screaming for them. So here's my idea for how to get America working again, permanently: the Federal Employment Bank (FEB). It's the fiscal policy analog to the Federal Reserve Bank (FRB) which conducts monetary policy. The FEB would replace the current unemployment insurance system, and it would do the following:

1. The FEB would be constituted in the same way as the FRB, with independent members.
2. All unemployment insurance premiums would be paid into the FEB.
3. If the unemployment rate exceeds 6% for two consecutive months, the FEB employment program would open automatically. Any mentally capable adult citizen or legal permanent resident could sign up for an FEB job with a minimum guaranteed tenure of 12 months (subject to satisfactory job performance).
4. All jobs would be full time and would pay at least $10/hour (adjusted annually for inflation). The FEB board could add up to 33% bonuses for jobs that are more difficult to fill, such as physically demanding jobs. The FEB could also add up to 20% to wages for high cost of living areas.

More after the jump....

5. Each employee must be offered no fewer than three substantially different job roles based on his/her capabilities, and the employee must accept one of those choices to remain in the program.
6. Jobs offered outside the employee's local area would include basic dormitory-style or better housing. (An example would be work involving public lands which are typically far away from population centers.)
7. Jobs must be of a substantial public service and/or public investment nature, and they must not be substitutes or replacements for work that is normally performed in non-recessionary times. They must never be jobs to refill positions that the public sector reduces or eliminates. The FEB must report annually to the public to document compliance with these terms, and the FEB must conduct open public hearings at least once every quarter to accept recommendations for job roles and for other public input purposes.
8. FEB employees are eligible to organize, although wages are fixed.
9. FEB employees remain eligible for all public assistance benefits they would otherwise be eligible to claim when earning what they earn.
10. The FEB would have the authority to adjust unemployment insurance premiums to maintain the solvency of the FEB's reserve fund, such as during prolonged recessions or depressions.
11. When the unemployment rate drops below 5.5% for two consecutive months, the FEB would stop accepting new entrants.
12. When the unemployment rate drops below 5.0% for two consecutive months, the FEB would no longer allow existing participants to resign for additional 12 month tenures, although they would be permitted to complete the balance of their terms.
13. No matter what the unemployment rate is, the FEB would be required to retain between 4,000 and 5,000 "peacetime" employees. In other words, there would never be a "cold start" if unemployment rises: the FEB would always have enough critical mass and institutional memory to swing into action rapidly.
14. The FEB and FRB would be permitted to meet and to coordinate their responses to economic crises.

President Obama was able to win an extension of unemployment benefits for some workers in the "fiscal slope" deal, but UI benefits are inadequate and subject to political whims. Many Americans have exhausted their benefits, and many more will. Long term unemployment makes it much more difficult to reenter the workforce, partly because employers do not perceive such workers to be high quality. (If they weren't hired quickly, then they must be "bad," right?)

The FEB is designed to address these and many other problems. Just as the FRB is the "lender of last resort" that protects our banking system, the FEB would be the "employer of last resort" that protects every family's economic well being. It would be fully paid for, automatic, and independent, just like the FRB.

Here are some examples of likely FEB jobs, in no particular order:

- Restoring wetlands;
- Improving and rehabilitating public parks;
- Making energy efficiency improvements to public buildings;
- Translating government critical government Web sites (such as public safety-related information) to serve immigrant communities;
- Providing free tax preparation assistance to underserved communities;
- Emergency response (hurricanes, floods, etc.)
- Increased visits to the elderly and disabled to help them with basic tasks;
- Teaching English to recent immigrants;
- Fixing public water and sewer systems.

And of course there are many, many more possible job roles.

The Federal Employment Bank: It's time to Keep America Working!

Originally posted to sipples on Thu Jan 10, 2013 at 03:14 AM PST.

Also republished by In Support of Labor and Unions.

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Comment Preferences

  •  Not sure what to say but it sounds interesting. (1+ / 0-)
    Recommended by:
    radarlady

    Was this your idea? Or if it is from somewhere else, got a link?

    Needless to say, something this logical will never get past the Republicans. Because, freedom. Or something.

  •  The Right to Work (3+ / 0-)
    Recommended by:
    radarlady, a2nite, Odysseus

    This idea has been tried before. It ended poorly.

      That's not to say it isn't a good idea. It's even part of the U.N.  Universal Declaration of Human Rights.
       It just need to be implimented in the correct way.

    ¡Cállate o despertarás la izquierda! - protest sign in Spain

    by gjohnsit on Thu Jan 10, 2013 at 05:46:44 AM PST

    •  It has also been tried more recently and worked (2+ / 0-)
      Recommended by:
      Odysseus, gjohnsit

      There was the jefes program in Argentina and a current program in rural India where there is a guarantee of 100 days of government work per year in addition to the seasonal agricultural work already extant. The program keeps down the influx of rural population into the cities looking for work to a level their economy can more effectively absorb. There have been a number of papers on these and on the MMT proposal for a Federal Job Guarantee program at New Economic Perspectives.

      An interesting aspect alluded to in the diary, perhaps inadvertently, is the analogy of the FEB with the FRB. The Federal Reserve Bank has two principle functions: it manages the payments and clearings system, and it controls the overnight interest rate which in turn strongly influences (controls) the bond market. The cost of the second function is the nation's debt service which was $360 Billion in FY 2012. Since in order to sell bonds to the private sector for money, the government MUST have first spent the money into the private sector, it is clear that ALL net government spending over tax receipts is first new money creation FOLLOWED by an equal quantity of debt creation. What makes the second phase of this process (the debt creation) necessary? To those who accept the MMT paradigm the answer is "nothing." It is an unnecessary net expense (new money creation) of $360 Billion or, at $25,000 each, 14.4 million jobs.

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